Process_Improvement_Paper

Process Improvement Paper Name here OPS/571 March 31, 2013 Larry Oslund Case Pick Process Improvement Introduction Of all the warehouse processes Case Picking gets the most attention. The labor associated with this order fulfillment takes up and large portion of the warehouse operating budget and is directly connected to customer satisfaction. For a 3PL like ours, we service not only a major Big Box Retailer but the thousands of customers that visit its stores on a daily basis. The key objectives are to increase productivity, reduce cycle time and increased accuracy; for the past 12 months CPH rates have dropped by almost 40%. This is decline in productivity has case a significant decline in revenue. It is vital that we improve this process in order to keep the contact with the customer for another 5 years. Process At the distribution center we practice Zone Picking which is the case-picking version of the assembly line. In Zone picking, as the name implies, order pickers are assigned a specific and physically defined zone in the pick area. The picker assigned to each zone is responsible for picking all of the SKUs that are located in the zone for each order. In the event that an order requires SKUs that are located in multiple zones, then the order is filled after it passes through each zone. This is typically referred to as "pick and pass" methodology. Additionally, in zone picking there is only one scheduling period per shift. Therefore, there is a cutoff point for orders to be queued into the order picking process and any order received after that cutoff point will get fulfilled during the next shift. (As the name implies, order pickers are assigned a specific and physically defined zone in the pick area. The picker assigned to each zone is responsible for picking all of the SKUs that are located in the zone for each order. In the event that an order requires SKUs that are located in multiple zones, then the order is filled after it passes through each zone. This is typically referred to as "pick and pass" methodology. Additionally, in zone picking there is only one scheduling period per shift. Therefore, there is a cutoff point for orders to be queued into the order picking process and any order received after that cutoff point will get fulfilled during the next shift. (Retrieved from the Web; http://www.trifactor.com; March 8, 2013) There are different factors that may affect the Case Pick process: • The process can be stalled from the beginning if the outbound coordinator fails to allocate cartons for the pickers to pick. If this were to happen, the process is starved as there is no work for the case picker. • No available MHE for the picker to use or the computer on an available MHE is not operational and needs to be looked at by an IT support technician • The group lead fails to set up the Flow rate in time for the pickers to get started. This can delay the process, but for a shorter time than not having an allocation or not having an available piece of equipment • During the pick process the picker visits several bins that are low or empty which would require the services of another associate to replenish the bin before he or she can continue the picking process. • Limited resources such as shrink-wrap. If we run out of shrink wrap the picker cannot complete his order and tag for staging. • Staging location at the outbound door is blocked with merchandise for another store. These are just a few technological and human factors that can affect the process design. Allocation time and Desk set up time can be measured on a daily basis; however, on critical area that we measure is the actual time it takes to pick a complete work assignment. The target pick rate for case picking is 80 Cartons per hour. Of all the warehouse processes Case Picking gets the most attention. The labor associated with this order fulfillment takes up and large portion of the warehouse operating budget and is directly connected to customer satisfaction. For a 3PL like ours, we service not only a major Big Box Retailer but the thousands of customers that visit its stores on a daily basis. The key objectives are to increase productivity, reduce cycle time and increased accuracy. Bottlenecks In the distribution center bottlenecks occur not only at the packing station but during the picking process itself. Initial lean analysis and improvement initiatives came to the conclusion that dividing case pick orders before flowing them to the pickers would help improve efficiency, however; Observations have shown that the Picking Group Lead is unable to continuously supply the pickers with sufficient work. The company carries some 4,000 SKUs and fulfills about 12,000 cartons a day during the off-season, with that number jumping to 20,000-25,000 cartons during the holidays. With the pickers driving back and forth to the picking control station, it's getting more difficult for them to productively complete and palletize orders so that they may continuously support outbound loaders. With the case picking function being the main function responsible for successfully fulfilling store orders, allowing trucks to be loaded and shipped to store in the time designated by the customer, it is imperative that a new tool or operating system be implemented where pickers are feed orders systematically through their RF units and the order distribution is not depended on a single individual diving up orders. The company plans to invest in the Manhattan operating system within the next three years phasing out the less efficient Catalyst that it has been using for the last eight years. The Theory of Constraints, a methodology for identifying the most important limiting factors or constraints that stands in the way of achieving a goal and then systematically improving that constraint until it is no longer the limiting factor and Lean Manufacturing are two systematic methods for improving manufacturing effectiveness. Both methodologies have a strong customer focus and are capable of transforming companies to be faster, stronger, and more agile. However, they have very different approaches: ■The Theory of Constraints focuses on identifying and removing constraints that limit throughput. Therefore, successful application tends to increase manufacturing capacity. ■Lean Manufacturing focuses on eliminating waste from the manufacturing process. Therefore, successful application tends to reduce manufacturing costs. Lean Manufacturing strongly supports the idea of making the most of what you have, which is also the underlying theme for exploiting the constraint. For example, lean teaches to organize the work area (5S), to motivate and empower employees, to capture best practices (Standardized Work), and to brainstorm incremental ideas for improvement (Kaizen); all three tools currently being employed in our daily operations. Control Limits The control chart will be used to monitor the quality of the current picking process with the upper and lower control limits illustrating how the current processes if performing. If data points fall outside of these lines, it indicates that it is statistically likely there is a problem with the process. These lines are usually placed three standard deviations from the mean, so there is a 99.73 percent probability that a data point will be within those limits. The Mean CPH rate based on weekly data collected for a 5 week period is 53CPH, with the Upper Control limit being 75 CPH and Lower Control Limit is 31 CPH. On analysis of the Cartons per hours rates collected, the allocation and set-up times, the upper control limit is found to be 123.3 and the Lower control limit being -21.29. The data points analyzed fall in between the upper and lower limits. Analysis of the control chart indicates that the process is currently under control, that is, is stable, with variation only coming from sources common to the process with little to no corrections or changes to process control parameters needed. Data from the process therefore can be used to predict the future performance of the picking process. Seasonal Factors The home improvement business is in its true nature very seasonal. It sees a spike in sales during summer months when the weather is more conducive to home building and or repairs or improvements. Store inventory for our customer, on average, consists of up to 40,000 different kinds of building materials, home improvement supplies, appliances and lawn and garden products. Selections may vary from store to store because stores are always stocked with merchandise that is localized to match the area's specific market needs. When a repetitive pattern is observed over some time horizon, the series is said to have seasonal behavior. Seasonal effects are usually associated with calendar or climatic changes. (Arsham, 1994) Seasonal variation is frequently tied to yearly cycles; seasonal factors are taken into consideration when a forecast plan is being put together. The data collected over the five week period indirectly showed a spike in outbound carton volume; this is evident in the increase in case picker CPH rates. The SPRING BLACK FRIDAY and AC sales events resulted in increased receipts of air conditioners, fans, dehumidifiers, grills etc. These types of products being easy to process due to their size and weight, and the proper slotting on these seasonal items throughout the warehouse make for an improved pick process. Before these seasonal items were received, it was the role of operations and inventory control to ensure that these items were ▪ Strategically placed in a pick path that was be most efficient for the picker. ▪ Pick Face we doubled to hold twice the on hand inventory available to pick which ultimately reduced the frequency of replenishments ▪ Reserve location we strategically placed within 500 ft of pick zones. This would eliminate any bottleneck that may arise in the pick process such as extended wait time for the bin to be replenished. ▪ Pick locations were strategically located the closets possibly location to the outbound loading dock to minimize travel time. All these factors have shortened the cycle time for the completion of purchase order work assignment thus improving productivity significantly. In this instance, because of the type of seasonal merchandise being processed, case pick productivity has increased from an average of 35 cartons per hour to 65 cartons per hour; a 53% increase. Additional changes to the Picking Process when implemented will only improve productivity by removing areas of waste that have been identified. Confidence Interval Flowchart and Lessons Learned On closer examination of the case picking process within the distribution center, it is clear that the main factors affecting the effectiveness of the process are those that are systematic. By systematic I mean that the standard procedures that are built in by management from the beginning of the process that have negatively impacted the process’ efficiency, and the pickers ability to make the best of a process that are out of there control. The human elements in the case pick process for example, an associate’s physical ability and their willingness and ability to perform the task is a hindrance or bottleneck in the process, however, associates can be given the best chance possible to meet set efficiencies for this function, if management has built a process that has little to no limitations. One major change to the Case Pick Process comes at the start of the Process Flow Chart, and that would be in the Allocation of Orders. Orders are normally allocated at the beginning of the day so that the majority of the orders that are dropped in from the store level the day and night before can be captured. This allocation process can sometimes take upwards of 3 hours for the Outbound Coordinator to extract the data, building loads accord to routes and delivery schedules, for built loads to be ran through the customer’s Transportation Management System and then to wait for Warehouse Cut times to be generated so that purchase order work assignments can be generated and unloaded into the system. ▪ By allowing this process to be completed a minimum of 12 hour before the day said orders are to be processed, we can give the process a 3 hour head start at minimum. ▪ The Outbound supervisor of manager has the ability to plan the work load for the next day in advance ▪ Labor needs can be accessed and planned in advance as well. Determining whether it will be a shorted work day or whether or not there is a need for Overtime. With the allocation being system generated the night before during the 2nd shift; labels can be printed and make ready for the case pickers by the lead on the prior shift so that they is no waiting time for the Group leader to set up. Pickers can get the MHE, proceed to the control desk, retrieve their Work Assignments from the Heijunka Box and then proceed to pick. [pic] The Other main advantage and improvement to the picking process is how work assignment packets are put together. With the days Wave or Allocation being put together in advance and all at once, the entire day’s work is available to be sorted and truly put into Batches according to Priority Cut times and Loads, and the work can truly be broken into ZONEs for the pickers. As previously discussed, Zone Picking is the most efficient for on picking given the facilities layout and Z pick pattern that will allow the department to get the most productive CPH possible. References Chase, R. B., Jacobs, F. R., & Aquilano, N. J. (2006). Operations management for competitive advantage (11th ed.). New York, NY: McGraw Hill/Irwin Goldratt, A. Y. (2013). The theory of constraints and its thinking processes. Retrieved from http://www.goldratt.com/pdfs/toctpwp.pdf Order Picking Methods: Order Fulfillment - Order Picking Systems. Retrieved from the Web (2013) http://www.trifactor.com/Material-Handling-Engineering-and-System-Design/Order-Fulfillment-Order-Picking-System-Design/Order-Picking-Methods Gary Piakeci, Retrieved from the web, (2013). Order Picking: Methods and Equipment for piece pick, case pick and pallet pick operations. http://www.inventoryops.com/order_picking.htm Appendix A – Flow Chart [pic] Appendix B Raw Data |Process |Cycle time |Cycle time |Cycle time |Cycle time |Cycle time | |Order Allocation Time |45 mins |60 mins |150 mins |60 mins |120 mins | |Supervisor determines the number of cases |5 mins |15 mins |15 mins |15 mins |10 mins | |to be picked | | | | | | |Group Lead sets up Work Assignment for Case|15 mins |16 mins |17 mins |20 mins |15 mins | |pickers | | | | | | |Resources are made available |15 mins |15 mins |20 mins |25mins |0 mins | |Picker signs out MHE |5 mins |5 mins |10 mins |10 mins |5 mins | |Picker retrieves work assignment fro Flow |5 mins |8 mins |10 mins |5 mins |5 mins | |rack and scans into his work assignment | | | | | | |Pickers gets pallets and shrink-wrap to |5 mins |5 mins |5 mins |5 mins |5 mins | |start picking | | | | | | |Picker goes out and completes his work |35 |45 |59 |62 |65 | |assignment (Average Cartons picked per | | | | | | |hour) | | | | | | |Staging |2 mins |2 mins |2 mins |2 mins |2 mins |